UK Modern Slavery Act

What is the UK Modern Slavery Act ?

The UK modern slavery act is one of the most far reaching pieces of legislation in the world addressing issues of modern slavery. It consolidates current slavery and human trafficking offences, and introduces new preventive measures, support systems and a regulatory body. The modern slavery act includes new measures including trafficking reparation orders which encourage to use seized assets to compensate victims and prevention orders to ensure that those who pose a risk of commiting modern slavery offences cannot work in relevant fields, such as with children and gangmasters

The UK modern slavery act states that company must publish an annual statement if it has sales of more than £36 million and if some or all of its business is in the UK .It must confirm the steps taken to ensure slavery and human trafficking are absent from the business and supply chain or they must declare that no steps have been taken. This is in response to the global concern in growth of modern slavery globally as the ILO estimates that 21 million people in the world are victims of forced labor, a number that is driven by profits of USD 150 billion generated every year with this in practice. 44% of victims of slavery are transported across international borders due to geographic integrations of markets.

Modern Slavery in Context

Modern slavery has been found to exist in 167 countries around the world

19 million forced labor victims are exploited by enterprises or private individuals (ILO)

Profits of 150 billion USD are generated yearly from modern slavery(ILO)

The estimated number of people in modern slavery globally is 35.8million: equivalent to the population of Canada and only 10 countries account for 71% (Global slavery index)

Among the 168 million child laborers in 2012, 85 million were engaged in hazardous work conditions

In December 2014. the department of labor in the U.S listed 136 goods produced by forced labor or child labor in violation of international standards in 74 countries

Manufacturing , agriculture, construction, manufacturing and entertainment are among the sectors most concerned(ILO)

In absolute terms, the countries with the highest number of people in modern slavery are: India, China, Pakistan, Uzbekistan, Russia, Nigeria, Democratic Republic of the Congo, Indonesia, Bangladesh and Thailand

The governments that are taking the most action to end modern slavery are: Netherlands, Sweden, United States, Australia, Switzerland, Ireland, Norway, Georgia, Austria and the United Kingdom

Who will be impacted?

The UK modern slavery act will impact over 12,000 companies and their UK and international supply chains. Many companies are already working on their statements to ensure that they are in place for their next annual reporting cycle. Your business has to comply if it meets the two criteria; Global turnover of over £36mn and carries on a business or part of a business, in any part of the United Kingdom.

These rules apply to public and private companies, and partnerships, wherever they are incorporated or formed and in whatever sector they operate. Some more details regarding the scope of companies targeted by the law (i.e. turnover thresholds) are currently under regulatory review and are expected at a later date.

However, as currently written, the UK modern slavery act indicates that most large commercial entities, not limited to the retail and manufacturing sectors as required by its California counterpart, will be required to report. Publicly listed companies already meeting reporting requirements for the UK Companies Act 2006 will be able to report on their due diligence efforts in their existing disclosures, while as of yet, no details have been provided regarding private companies.

Learn about the implications of the UK modern slavery act on companies in the UK in our whitepaper

Is your Company Ready? The Requirements

The UK modern slavery act requires companies to explain, and publish, efforts to:

Identify and analyze the risks of human trafficking and slavery in the supply chain.

Create and Maintain internal accountability standards and procedures for employees and contractors and taking action on those who fail to meet company standards regarding slavery and trafficking.

Conduct audits of suppliers to evaluate supplier compliance with company standards for human trafficking and slavery in supply chains.

Require direct suppliers to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the country or countriesin which they aredoing business.

How to address the UK Modern Slavery Act?

No single organisation has all the answers to this. And no-one can provide an ‘out of the box’ solution. It’s more complicated than that. But we can help in many ways. We can provide the information you need to make sure you are not knowingly employing slave labour in your supply chain. This applies to human rights in a broader context than just the UK Modern Slavery Act.

We assess whether labour is freely supplied irrespective of legislation because free labour is a basic human right. That’s why we take a holistic approach and assess your supplier’s human rights policies, actions and reporting. This provides the information your compliance team will need to report on your efforts to prevent slavery in your supply chain.

EcoVadis provides the due diligence services, evidence-based rating and training in key CSR areas (including human rights issues) which demonstrate that your efforts are robust and thorough. We can help in 5 key areas:

1) Risk Assessment

We map supply chains to identify countries and sectors with the potential for slavery and human trafficking.

2) Evidence-based evaluation

Our unique methodology covers globally recognized human rights standards for slavery and human trafficking. This includes the Guiding Principles on Business and Human Rights, the UnitedNations Global Compact and ISO 26001. The assessment also takes into account the Conflict Minerals disclosure requirements under the Dodd-Frank Act, Section 1502.

3) Audit and product certification

Although we do not conduct audits, we incorporate audit data into our evaluation methodology. These can identify compliance gaps within the supply chain that can subsequently be addressed with a corrective action plan.

4) Internal measurement standards

We help companies to develop Supplier Codes of Conduct. These formalize expectations on internationally recognized human rights principles, including the prevention of slavery and trafficking. We also provide a qualitative assessment of internal procedures, and propose corrective actions to address potential issues in the supply chain.